S3 Ep 13 | Chris and John Talk Rent vs. Buy

Chris and John Talk Through Rent vs. Buy

Chris knows all the buttons to push to get John, our resident housing bear, to pull out his rent vs. buy calculator:

1:37 – How should we start thinking about real estate
6:30 – Is renting just a phase of life
10:24 – Is there an equation for rent vs buy
15:33 – What is ‘pride of ownership’ worth?
19:25 – How to live in a housing bubble
24:24 – Rent vs Buy when you’re not living in Toronto or Vancouver
27:25 – John breaks down the rent vs buy math
33:07 – Is a house a tool for forced savings?
38:21 – The social pressure to own a home as a Canadian
43:51 – How does longterm renting work?
54:18 – Defining Step Zero

If you haven’t seen this before, it’s a very detailed and customizable rent-vs-buy calculator. It assumes that all else being equal, you can compare apples-to-apples options for your shelter. If buying costs more, the renter will save the difference in monthly cash flow and invest it. It allows you to model a change in interest rates over time (specifying a rate for years 1-5, 5-10, and 10+), includes the effect of transaction fees, house price appreciation, taxes on the renter’s investments, and most importantly: investment returns that compound over time.